1H21 results will have been hit by the full impact of lockdown The impact of lockdown on 1H21 results is difficult to forecast with any accuracy, given the variation in response to the pandemic and length of lockdown by country, Government support available, and the wide difference in cost flexibility and profitability by region. We forecast 1H21E Group sales -25% to £2bn with underlying PBT (pre IRFS16) down 85% to £24.4m. Sports fashion EBIT is forecast to be down 70% to £56m with Outdoor losses increasing to £28m (1H20 losses £18.2m). Anecdotal evidence suggests that athleisure remained an in-demand category over lockdown. Management last commented, at the FY20 results at the beginning of July, that trading YTD during lockdown had been better than expected, with online sales up triple digit. Online penetration historically was c.20% of ‘normal sales.’ This necessitated a warehouse reconfiguration, so JD now has the capacity to deal with a ‘Black Friday’ every day. There has been little promotional activity so margin is likely to be better. Online growth is likely to have slowed from the elevated levels post stores reopening. Stores began reopening from the end of April, with most stores open from 15th June when the UK finally started to reopen. Reduced footfall has been partially offset by stronger conversion. Trading updates from others, such as Nike, suggests US sales could be up year-on-year, with the UK in positive territory and Europe down c.20% to 30%. The phased nature of the reopening makes it difficult to gauge sustainable demand, with some pent up demand initially expected. With a couple of months of trading under their belt post reopening, management should hopefully have a clearer view of how the group may be able to trade Christmas under social distancing. We will be looking for an update on the new product pipeline after the brands rephrased their launch programme, as well as a view on promotional activity and stock levels in the wider market. Has confidence changed and impacted views on the scale of the opening programme going forward and the completion of the US conversion programme over the next 2 years? Well-positioned to resume historic double-digit growth profile in the near future. Reiterate BUY Valuation (CY21E PE 18.9x) looks undemanding for an International roll-out story and, in our view, does not reflect the strength of its brand relationships nor JD’s market niche with an industry-leading, highly elevated consumer proposition. We believe the company is well positioned to quickly resume its historic double-digit growth trajectory and see risk to forecasts as on the upside, though clearly the path of the pandemic over the next 6 months remains unclear.